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We describe a two-step algorithm for estimating dynamic games under the assumption that behavior is consistent with Markov perfect equilibrium. In the first step, the policy functions and the law of motion for the state variables are estimated. In the second step, the remaining structural parameters are estimated using the optimality conditions for(More)
Online auctions have recently gained widespread popularity and are one of the most successful forms of electronic commerce. We examine a dataset of eBay coin auctions to explore features of online bidding and selling behavior. We address three main issues. First, we measure the extent of the winner's curse. We find that for a representative auction in our(More)
Internet auctions have recently gained widespread popularity and are one of the most successful forms of electronic commerce. We examine a unique dataset of eBay coin auctions to explore the determinants of bidder and seller behavior. We first document a number of empirical regularities. We then specify and estimate a structural econometric model of bidding(More)
We study the identification and estimation of preferences in hedonic discrete choice models of demand for differentiated products. In the hedonic discrete choice model, products are represented as a finite dimensional bundle of characteristics, and consumers maximize utility subject to a budget constraint. Our hedonic model also incorporates product(More)
How large are the benefits of transportation infrastructure projects, and what explains these benefits? To shed new light on these questions, I collect archival data from colonial India and use it to estimate the impact of India's vast railroad network. Guided by six predictions from a general equilibrium trade model, I find that railroads: (1) decreased(More)
We study the estimation of static games of incomplete information with multiple equilibria. A static game is a generalization of a discrete choice model, such as a multinomial logit or probit, which allows the actions of a group of agents to be interdependent. While the estimator we study is quite flexible, we demonstrate that in most cases it can be easily(More)
Inspired by facts from the private-sector construction industry, we develop a model that explains many stylized facts of procurement contracts. The buyer in our model incurs a cost of providing a comprehensive design and is faced with a tradeoff between providing incentives and reducing ex post transaction costs due to costly renegotiation. We show that(More)
In capital markets, top-tier investors may have better abilities to monitor and manage their investments. In addition, there may be sorting in these markets, with top-tier investors investing in the best deals, second-tier investors investing in the second-best deals, and so forth. To separate and quantify these two effects, a structural model of the market(More)
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—We develop an approach to identify and test for bid rigging in procurement auctions. First, we introduce a general auction model with asymmetric bidders. Second, we study the problem of identii cation in our model. We state a set of conditions that are both necessary and suff cient for a distribution of bids to be generated by a model with competitive(More)